That’s wrong. Half are citizens. Another huge portion are here legally under various programs. Many of them are working.
None of which is a subtle claim that you are high, racist or a Nazi.
There are more now than in Biden’s last full month in office. Did they leave and come back?
Look at the chart again.
the high water mark was Jan 1, 2025
They kept comng and kept coming until something happened in January.
Then they started leaving.
Do -YOU- think it is foreign born US citizens who left?
1.2 milion of them have left.
Do you really think that H1-Bs and citizens and mail-order brides left in some substantial proportion?
I think it’s a mix. I think there are probably a good number of visa holders and graduate students who said no mas as well. Where we might differ is I think that’s a bad outcome, not a good one, in a labor market that is so short of labor.
Hmm you remember Arthur Laffer right?
He said someting like (paraphrase) "if we increase wages (via a tax cut) 1% then labor supply will increase more than 1%.
I wonder what ever happend to that idea.
If only we had data to test Laffer’s hypothesis about price elasticity of labor supply.
Let’s be sure we are on the same page.
According Arthur Laffer’s theory:
If we increase wages, (such as by cutting taxes) just a tiny bit, like 1%,
we will get 1.1% or 1.5% or even 2% more labor and thus tax cuts will pay for themselves.
That was Laffer’s theory, right?
How did it pan out? Was he right or wrong?
If only we had data to demonstrate Laffer’s model. Say, 45 years worth of it across 50 states and 20 or so post-industrial economies.
Hmm obviously we do.
And if I recall the data shows:
- the responsivness of labor to wage increases is not very high (Laffer was wrong)
- it takes quite a bit more money to get people to work overtime, work a side gig, change their plans etc. (Laffer was wrong)
- it can vary, (recession vs expansion, old women vs young men, etc.) butin genral Americans value their free time and it takes LOT to get them to work more. A 1% wae increase (tax cut) definitely will not increase labor supply more than 1%. (Laffer was wrong.)
Do I recall correctly? Are the above statements true?
Obviously different economists arrive at different conclusions. That reads about right to me, but if you torture the data long enough it will confess to anything. The recent Kansas experiment didn’t seem to pan out in Laffer’s favor (but again, there are always caveats.)
Laffer and Marx brought the same use of questionable economic theory as a tool of politics -From very different angles, of course.
Where I might find some agreement with Laffer is his basic argument that lower tax rates - especially on the corporate side - can lead to far better compliance and limit resources wasted on tax avoidance. I’ve always thought direct corporate taxation is folly.
So, in econo-speak:
“If Laffer were correct then the elasticity of labor supply would be significantly greater than 1. Yet economists have measured it many times. About the largest number they have found was 0.3, but numbers s low as 0.1 are not unusual.”
In fact Mankiw uses almost that exact pair of sentences.
“Most estimates of the labor supply elasticity for prime-age males are quite low, typically between 0.1 and 0.3.”
In everyday terms (my words):
“Laffer is wrong. We would not see a 1% increase in labor supply with a mere 1% increase in wages. To get a labor supply increase of 1% wages would need to rise at least 3% and possible 10%.”
Do I understand it right? Laffer was wrong because it would take a 3-10% increase in wages to get labor supply to increase 1%?
Biden was better. Ask any Brandonite and they’ll tell you…Trump, shutting down the border, tariffs raising billions, stopping inflation, attacking the trade imbalances with China plus stopping them from buying our land, DOGE, destroying Iran’s nuclear capabilities…it’s all baaa, baaa, baaad…amirite? 
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Again, if you torture the data long enough it will confess. While I don’t trust Laffer’s estimates, please don’t make me agree with Greg Mankiw 
.
Whatever the number is, if we’re talking about prime-age adults (especially men) I’d be shocked if it even approaches 1/2. It’s probably higher for women and young people.
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Well, we’ve got these two estimates:
-
Michael Keane, 2011
Labor Supply and Taxes: A Survey
0.05 to 0.3 (males), 0.2 to 0.8 (females)
→ General labor supply, focusing on male and female elasticities -
Richard Blundell and Thomas MaCurdy, 1999
Labor Supply: A Review of Alternative Approaches
0.1 to 0.3 for men, 0.4 to 0.6 for women
General labor supply, comprehensive review across various studies
They seem to match (independently verify each other), and I have tortured no data.
What do they suggest?
How much would wages need to increase if the goal is to increase labor supply 1%? (I’m figuring the middle of their data indicates something like 3%.)
Ok, those two found some things that seem reasonable enough.
They aren’t labor market equilibrium models but that doesn’t seem to be relevant
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So each of them found that labor supply elasticity is a range centering around 0.3 or so,
And
a labor supply elasticity of 0.3 means to increase labor supply 1% it would require a estimated 3% pay increase (Laffer was wrong. He said a much smaller pay increase would have that effect.).
That seems to imply that if 1% of the workforce is departed, then employers will need to increase wages roughly 3%.
EX:
- Landscaping jobs and Nanny jobs will pay more to replace lost workers
- McDonalds and Walmart will pay more to entice their workers to stay.
“Seems to imply” is doing a heavy lift there. I don’t think a 1% decline in the size of the overalll labor force will lead to 3% wage increase for a nanny. If that was the case we’d see it in difference-in-difference models across the states.
Everything else held constant, did the labor supply shrink in 2022 when real wages declined?
I’m trying to reclal… hmm 2022. Immeidate post COVID. I think that was an ear of early retirments, quiet quitting etc. coming our of COVID amde things weird but
- net—the US born labor force stagnated
- net-- the only people entering the labor force were not born here.
I might have the date wrong but I recall repeatedly posting “100% of all new jobs went to perosns born abroad.”
I’ll look up some data at FRED.
So did the labor force supply decrease as a result of declining teal wages?
Did the labor supply decrease as a result of TEFRA in 1982?
Do we expect the labor supply to decrease as a result of the recent tax hikes?